Officials: China real estate recovering from debt crackdown

China’s vast real estate industry is recovering from a slump triggered by tighter debt controls, a deputy central bank governor said Friday, after a wave of defaults by developers rattled global financial markets.

Pan Gongsheng mentioned Evergrande Group, the global industry’s most heavily indebted developer, but gave no update on its government-supervised efforts to restructure $305 billion in debt to banks and bondholders.

“Market confidence is recovering. Transaction activity in the real estate market has increased,” said Pan at a news conference ahead of the meeting of China’s legislature. “The financing environment, especially for highquality enterprises, has improved significantly.”

Pan gave no indication Beijing planned significant changes in its debt controls, known as “three red lines.”

China’s economic growth slid in mid-2021 after regulators who worry debt levels are dangerously high blocked Evergrande and other heavily indebted developers from borrowing more money. That added to disruption from anti-virus controls.

Some developers collapsed and others defaulted on billions of dollars of debts to Chinese and foreign bond investors. Evergrande has said it has $330 billion in assets but was struggling to convert that into cash to repay lenders.

Local governments took over some unfinished projects to make sure families got apartments that already were paid for.

In the final quarter of 2022, bond sales by developers rose 22% compared with a year earlier to $17.5 billion, according to Pan. He said bank loans for real estate development also increased.

Meanwhile, the central bank governor said Beijing plans to keep the politically sensitive exchange rate of its yuan stable after